CCS' Guidance on electronic communications and the issue of initial disclosure of procurement documents

As discussed in relation to regs. 53 and 28 of the Public Contracts Regulations 2015 (PCR2015), there has been unrest in the UK public procurement practitioner community derived from an assumption that new procurement rules required contracting authorities to disclose absolutely all contract documents in full and final form when they first published a notice calling for competition for a specific contract.

My preliminary view was that such strict reading of reg.53(1) PCR2015 was unnecessarily overcautious and that contracting authorities could carry on disclosing tender documents in a staggered manner provided they complied with general principles of transparency and equal treatment, and they made sure that no interested undertaking or tenderer was placed at a disadvantage (see here).

The Crown Commercial Service (CCS) has now published Guidance on e-Procurement and electronic communications that, in my view, supports this flexible approach and should reassure contracting authorities that the new rules preserve the level of flexibility existing under the pre-2014 Directives. The key to that flexibility stems from a reasonable and dynamic approach to the concept of 'procurement documents', which the CCS takes to provide
a wide explanation of what might constitute procurement documents and that where individual regulations refer to “procurement documents”, what is meant by that wording changes based on the different stages of the process that has been reached. As the procurement and competition becomes more crystallised, CCS expect more of the documents falling within that wide definition of procurement documents to be generated and therefore supplied. In contrast, at very early stages, fewer of the documents, if any, would be included. We believe a purposive interpretation is appropriate here.
Such interpretative approach is well suited to a functional interpretation of the general rules in the PCR2015 (and Directive 2014/24, by implication), which adjusts the meaning of concepts and rules to the operational requirements of each of the specific procedures they apply to. This seems particularly clear in this passage:
... for procedures involving negotiations, or two stage process, the contracting authority would need to publish all the documents that are available so the market could make the decision on whether to express an interest or not. In construction for example, detailed specifications are normally not available until further into the procurement process and therefore those documents would not be required to be published at the advert stage. However the procurement documents that explain what the final output would be, volume/size, any specific specialities etc would be required at advert stage as the supplier needs them so they can make the decision on whether to express an interest or not, and whether they would have the capacity and capability to do the work, and if not time to start preparing to build that capacity/capability. These documents would then be added to as more detailed information is developed. 
I think that this guidance should be welcome and that the discussion can be left behind, as it seems clear that the interpretation of the rules is not going to be as unreasonable and tight as some initially feared. 

(Non)disclosure of leniency applications in the proposed 'Damages Directive': Commission v CJEU?

The European Commission has finally published its Proposal for a Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union [COM(2013) 404] (the proposed 'Damages Directive'). 

Amongst many other interesting (and controversial rules), the proposed Damages Directive tackles the issue of the disclosability of leniency materials, which has been recently analysed by the Court of Justice of the European Union (CJEU) in Donau Chemie and had been previously analysed in Pfleiderer (which were discussed here).

The proposed 'Damages Directive' follows the prior Resolution of the Meeting of the Heads of the European Competition Authorities of 23 May 2012, on the protection of leniency material in the context of civil damages actions and is based on the argument that
In the absence of legally binding action at the EU level, the effectiveness of the leniency programmes — which constitute a very important instrument in the public enforcement of the EU competition rules — could thus be seriously undermined by the risk of disclosure of certain documents in damages actions before national courts.
Remarkably, this argument was adopted by Advocate General Jääskinen in his Donau Chemie Opinion (para 56), but was later rejected in very clear terms by the CJEU in the Donau Chemie Judgment, where it very clearly emphasised that:
as regards the public interest of having effective leniency programmes [...] it should be observed that, given the importance of actions for damages brought before national courts in ensuring the maintenance of effective competition in the European Union (see C‑453/99 Courage and Crehan [2001] ECR I‑6297, paragraph 27), the argument that there is a risk that access to evidence contained in a file in competition proceedings which is necessary as a basis for those actions may undermine the effectiveness of a leniency programme in which those documents were disclosed to the competent competition authority cannot justify a refusal to grant access to that evidence (C-536/11 at para 46, emphasis added).
Consequently,  the CJEU restricted the possibility to reject the disclosure of leniency documents to very specific and narrow circumstances by stressing that
The mere risk that a given document may actually undermine the public interest relating to the effectiveness of the national leniency programme is liable to justify the non-disclosure of that document (C-536/11 at paras 48, emphasis added).
This is in clear contrast with the Commission's policy-based approach in the proposed 'Damages Directive', where specific rules against the disclosure of leniency documents are established in Article 6 on the limits on the disclosure of evidence from the file of a competition authority:
1. Member States shall ensure that, for the purpose of actions for damages, national courts cannot at any time order a party or a third party to disclose any of the following categories of evidence:
(a) leniency corporate statements; and
(b) settlement submissions.
2. Member States shall ensure that, for the purpose of actions for damages, national courts can order the disclosure of the following categories of evidence only after a competition authority has closed its proceedings or taken a decision referred to in Article 5 of Regulation No 1/2003 or in Chapter III of Regulation No 1/2003:
(a) information that was prepared by a natural or legal person specifically for the proceedings of a competition authority;
(b) information that was drawn up by a competition authority in the course of its proceedings.
3. Disclosure of evidence in the file of a competition authority that does not fall into any of the categories listed in paragraphs 1 or 2 of this Article may be ordered in actions for damages at any time.
As the explanatory memorandum clarifies, the rules have the following aims:
To prevent that the disclosure of evidence jeopardises the public enforcement of the competition rules by a competition authority, the proposed Directive also establishes common EU-wide limits to disclosure of evidence held in the file of a competition authority:
(a) First, it provides for absolute protection for two types of documents which are considered to be crucial for the effectiveness of public enforcement tools. The documents referred to are the leniency corporate statements and settlement submissions. The disclosure of these documents risks seriously affecting the effectiveness of the leniency programme and of settlements procedures. Under the proposed Directive, a national court can never order disclosure of such documents in an action for damages.
(b) Second, it provides for temporary protection for documents that the parties have specifically prepared for the purpose of public enforcement proceedings (e.g. the party’s replies to the authority’s request for information) or that the competition authority has drawn up in the course of its proceedings (e.g. a statement of objections). Those documents can be disclosed for the purpose of an antitrust damages action only after the competition authority has closed its proceedings.
(c) Apart from limiting the national court’s ability to order disclosure, the above protective measures should also come into play if and when the protected documents have been obtained in the context of public enforcement proceedings (e.g. in the exercise of one of the parties’ right of defence). Therefore, where one of the parties in the action for damages had obtained those documents from the file of a competition authority, such documents are not admissible as evidence in an action for damages (documents of category (a) above) or are admissible only when the authority has closed its proceedings (documents of category (b) above).
(d) Documents which fall outside the above categories can be disclosed by court order at any moment in time. However, when doing so, national courts should refrain from ordering the disclosure of evidence by reference to information supplied to a competition authority for the purpose of its proceedings. While the investigation is on-going, such disclosure could hinder public enforcement proceedings, since it would reveal what information is in the file of a competition authority and could thus be used to unravel the authority’s investigation strategy. However, the selection of pre-existing documents that are submitted to a competition authority for the purposes of the proceedings is in itself relevant, as undertakings are invited to supply targeted evidence in view of their cooperation. The willingness of undertakings to supply such evidence exhaustively or selectively when cooperating with competition authorities may be hindered by disclosure requests that identify a category of documents by reference to their presence in the file of a competition authority rather than their type, nature or object (e.g. requests for all documents in the file of a competition authority or all documents submitted thereto by a party). Therefore, such global disclosure requests for documents should normally be deemed by the court as disproportionate and not complying with the requesting party's duty to specify categories of evidence as precisely and narrowly as possible.
(e) Finally, to prevent documents obtained through access to a competition authority’s file becoming an object of trade, only the person who obtained access to the file (or his legal successor in the rights related to the claim) should be able to use those documents as evidence in an action for damages.
In my view, the rules that support points (a) to (d) are in contrast with the Donau Chemie Judgment and are bound to clash with existing EU Law in two respects: firstly, they can be disproportionately limiting the possibilities to obtain effective redress and, consequently, limiting the effectiveness of Articles 101 and 102 TFEU as interpreted by the CJEU in Courage. And, secondly, they can be disproportionately restricting the procedural autonomy of Member States by excluding the ability of domestic courts to conduct the balancing of interests between leniency defendants and damages claimants that the CJEU has stressed both in Pfleiderer and Donau Chemie

Hence, in my opinion, the rules in the Commission's proposed 'Damages Directive' are inadequate and should be revised, particularly as the absolute protection of  leniency corporate statements and settlement submissions are concerned, which are based on a policy option that has been disapproved by the CJEU very recently. 

The rest of the rules on temporary protection of evidence and preemption of discovery-like requests of evidence should also be revised, since they may make it very burdensome for potential claimants to actually have access to the requested evidence (for alternative proposals discussed in view of the 2005 Green Paper on Damages, see Sanchez Graells, 'Discovery, Confidentiality and Disclosure of Evidence Under the Private Enforcement of EU Antitrust Rules'). Otherwise, there will be very significant difficulties for the claim of damages in private actions due to infringements of the EU's and Member States' competition rules.

#CJEU disagrees with AG Jaaskinen on access to #leniency files for damages claims purposes (C-536/11)

In its Judgment of 6 June 2013 in case C-536/11 Donau Chemie and Others, the Court of Justice of the European Union (CJEU) has disagreed with the Opinion of Advocate General Jääskinen on the need for an (almost) absolute protection of leniency applications from disclosure to third parties interested in claiming damages (which was criticised here). 

In my opinion, this development should be most welcome and puts pressure on the European Commission to change its own position regarding the disclosure of leniency applications for the purposes of damages actions before the national courts of the Member States.

It should be recalled that AG Jääskinen tried to carve out a truly significant exception for leniency applications not to be subjected to general rules on disclosure of evidence to potential damages claimants. In his opinion, he indicated that, on the one hand, and on the basis of the general requirements of the principle of effectiveness (effet utile) of EU law
51. […] subjecting access to public law competition judicial files to the consent of the infringer of the competition rules amounts to a significant deterrent of the exercise to a right to claim civil damages for breach of EU competition law. The Court has ruled that if an individual has been deterred from bringing legal proceedings in good time by the wrong-doer, the latter will not be entitled to rely on national procedural rules concerning time limits for bringing proceedings. I can see no reason for confining the application of this principle to limitation periods, and would advocate its extension to onerous rules of evidence that have an analogous deterrent effect. I would further query the compliance of remedies that deter enforcement of EU law rights with Article 19(1) TEU (footnotes omitted, emphasis added).
On the other hand, however, the AG considered that
55. Article 47 [of the Charter of Fundamental Rights] is also relevant to the case to hand because it guarantees the fairness of hearings, which serves to protect the interests of the undertakings that have participated in the cartel. In my opinion, access by third parties to voluntary self-incriminating statements made by a leniency applicant should not in principle be granted. The privilege against self-incrimination is long established in EU law, and it is directly opposable to national competition authorities that are implementing EU rules.
56. It is true that leniency programmes do not guarantee protection against claims for damages and that the privilege against self-incrimination does not apply in private law contexts. Despite this, both public policy reasons and fairness towards the party having given incriminating declarations within the context of a leniency programme weigh heavily against giving access to the court files of public law competition proceedings where the party benefiting from them has acted as a witness for the prosecuting competition authority (footnotes omitted, emphasis added). 
As I said, in my view, both positions are logically irreconcilable in that leniency applicants would have (by definition) prevented by their own unilateral will, access by third parties to the parts of the file that could be used to claim damages against them (something the AG rightly criticises at para. 51 of his Opinion).

In light of that debate, I think that the Donau Chemie Judgment should be welcome for the more balanced approach that the CJEU adopts:
39 […] in so far as the national legal measure or rule at issue in the main proceedings allows the parties to the main proceedings having infringed Article 101 TFEU the possibility of preventing persons allegedly adversely affected by the infringement of that provision from having access to the documents in question, without taking account of the fact that that access may be the only opportunity those persons have to obtain the evidence needed on which to base their claim for compensation, that rule is liable to make the exercise of the right to compensation which those persons derive from European Union law excessively difficult.
40 That interpretation is not called into question by the Austrian Government’s argument to the effect that such a rule is especially necessary in respect of documents lodged by parties in a file relating to proceedings under a leniency programme, in order to ensure the effectiveness of such a programme and therefore also that of the application of Article 101 TFEU.
41 Admittedly [...] Member States must not apply the rules on file access in such a manner as to undermine public interests such as the effectiveness of anti-infringement policies in the area of competition law.
42 The Court has recognised that leniency programmes are useful tools if efforts to uncover and bring an end to infringements of competition rules are to be effective and thus serve the objective of effective application of Articles 101 TFEU and 102 TFEU. The effectiveness of those programmes could be compromised if documents relating to leniency proceedings were disclosed to persons wishing to bring an action for damages. The view can reasonably be taken that a person involved in an infringement of competition law, faced with the possibility of such disclosure, would be deterred from taking the opportunity offered by such leniency programmes (C-360/09 Pfleiderer [2011] ECR I-5161, paragraphs 25 to 27).
43 It is clear, however, that although those considerations may justify a refusal to grant access to certain documents contained in the file of national competition proceedings, they do not necessarily mean that that access may be systematically refused, since any request for access to the documents in question must be assessed on a case-by-case basis, taking into account all the relevant factors in the case (see, to that effect, Pfleiderer, paragraph 31).
44 In the course of that assessment, it is for the national courts to appraise, firstly, the interest of the requesting party in obtaining access to those documents in order to prepare its action for damages, in particular in the light of other possibilities it may have.
45 Secondly, the national courts must take into consideration the actual harmful consequences which may result from such access having regard to public interests or the legitimate interests of other parties.
46 In particular, as regards the public interest of having effective leniency programmes referred to by the Austrian Government in the present case, it should be observed that, given the importance of actions for damages brought before national courts in ensuring the maintenance of effective competition in the European Union (see C‑453/99 Courage and Crehan [2001] ECR I‑6297, paragraph 27), the argument that there is a risk that access to evidence contained in a file in competition proceedings which is necessary as a basis for those actions may undermine the effectiveness of a leniency programme in which those documents were disclosed to the competent competition authority cannot justify a refusal to grant access to that evidence.
47 By contrast, the fact that such a refusal is liable to prevent those actions from being brought, by giving the undertakings concerned, who may have already benefited from immunity, at the very least partial, from pecuniary penalties, an opportunity also to circumvent their obligation to compensate for the harm resulting from the infringement of Article 101 TFEU, to the detriment of the injured parties, requires that refusal to be based on overriding reasons relating to the protection of the interest relied on and applicable to each document to which access is refused.
48 The mere risk that a given document may actually undermine the public interest relating to the effectiveness of the national leniency programme is liable to justify the non-disclosure of that document (C-536/11 at paras 39-48, emphasis added).
By rejecting the general criterion proposed by AG Jääskinen that leniency documents should in principle be protected from disclosure, the CJEU has preserved the potentiality for  damages actions to actually develop in the EU. 

However, the conditions under which the considerations regarding the circumstances in which the mere risk of disclosure of a specific document can be sufficient to prevent it on the basis that it could 'actually undermine the public interest relating to the effectiveness of the national leniency programme' (para 48) could have been explored in some more detail. A comparison of the English and the French, Spanish and Italian versions supports, in my view, the need for a very restrictive interpretation of this 'escape clause' created by the CJEU--which should only be applied under relatively extreme circumstances where the potential damage to the leniency system could be so great as to render it practically useless.

In view of the Donau Chemie Judgment, it may now be time for the European Commission to revise its own approach to the disclosure of leniency applications and to modify the policy adopted in the Notice on Cooperation with the National Courts, where it is clearly established that
the Commission may refuse to transmit information to national courts for overriding reasons relating to the need to safeguard the interests of the Community or to avoid any interference with its functioning and independence, in particular by jeopardising the accomplishment of the tasks entrusted to it(45). Therefore, the Commission will not transmit to national courts information voluntarily submitted by a leniency applicant without the consent of that applicant (para 26, emphasis added).
Such an absolute protection seems clearly at odds with the approach adopted by the CJEU and, consequently, a revision seems in order as a matter of institutional loyalty. Let's see how quickly it can take place...